“Best Rate Guarantees” Judged Misleading and Unscrupulous – Part 1

In a long-running thread on the Business Traveller forums, members share tales of woe regarding attempts to take advantage of a hotel chain’s – in this case mainly IHG’s – “Best Rate Guarantee” policy. Many who make the attempt are denied in similar fashion.

i booked a few rooms on IHG website and rate didnt include breakfast. later i saw the exact same rooms on expedia for cheaper price and even worse included breakfast for the price so not only was expedia rate cheaper but it also included breakfast. i emailed IHG and guess what, they told me – i didnt qualify because i didnt choose the IHG rate which included breakfast so i wasnt comparing like with like. ~joeadvisory

Although prices frequently fluctuate online, they would only accept online claim forms. I submitted my claim within 15 minutes of booking, and they responded more than 24 hours later, and by then the price on hotels.com had changed. It is poor business practice for Holiday Inn to make such guarantees and then create so many loopholes (i.e., online claim submissions rather than phone calls when online prices fluctuate) so that they would rarely (if ever) have to honor it. ~deb0rah

The biggest ‘con’ I found is their verification process. As we all know hotel room prices, like airfares are volatile. They are there one hour, gone the next. What I found with IHG is that sometimes they were attempting to ‘verify’ the price many hours after I submitted the claim – then replying that they had not been able to verify the rate (as it had now gone). ~rferguson

AlDanberg even claims some inside knowledge as to how best rate guarantee submissions are handled:

I have just learnt form an ex staff who was part of the IHG team that manages the Best price guarantee that they are penalized with “demerit points” system for each guarantee they honor! No matter how obvious the price discrepancy is, the primary call attendants are not allowed to honor it and has to be referred to a manager/supervisor who would then try to find a way not to honor it. If he fails and the client continues to complaint it will then be honored and the manager would be awarded “demerit points” (based on the value of the guarantee!!) and bonuses would be heavily affected!

During this discussion one of the members referenced an article in The Telegraph which details that the UK’s Office of Fair Trading was investigating allegations of price fixing between the major hotel chains and online travel companies like Expedia and Booking.com.

In researching this further, it seems a similar case was brought to the courts in the U.S., and was decided by U.S. District Judge Jane J. Boyle in February 2014. You can read the full decision, but the relevant point is basically this – if a site like Expedia, Orbitz, Travelocity, etc wants to sell a hotel chains rooms, they have to sign an agreement with the hotel that says they won’t offer rooms at a price below what the hotel sets as a minimum price. The court determined that isn’t illegal – it’s just sensible business practice.

However, the court did take issue with the “Best Rate Guarantee” marketing promotions that resulted from these agreements. Specifically, Judge Boyle writes:

While Defendants posit that the rate guarantees had the laudable goal of assuring consumers they would not have to go searching elsewhere for a better online rate, if this was truly the desired effect, the advertisement would not likely induce consumers to go search elsewhere with the illusory promise of an award if a lower rate is found. Instead, the guarantees were intended to attract more consumers to book at that particular defendant’s website, with the promise that the consumer will not find a better price than the “best” being offered on that website. In short, it is not in the public’s best interest to allow unscrupulously misleading advertisements made for commercial gain.

So then, why do you still see “Best Rate Guarantees” on hotel and various hotel-booking websites? Because, in Judge Boyle’s opinion, the plaintiffs were unable to show credible and specific damage. Sure, the best rate guarantees were unscrupulous and misleading, but there was no proof that better rates would have been made available and therefore the guarantees weren’t necessarily harmful in an economic sense. (Note: I am not a lawyer and don’t even play one on this blog. That’s my layman’s takeaway from the judgement. I welcome any actual legal types who might be reading this to correct my understanding in the comments section.)

In short, any “Best Rate Guarantee” you see is, at best, deceptive.

Not worth the digital ink they are printed in.

Designed solely to benefit the hotel but worded in a way to make you think you are getting a deal and possibly trick you into wasting your time scouring the interwebs for a better price.

“But wait,” you might be thinking to yourself, “I have benefited from these guarantees so they can’t be completely false.”

It’s true. Things do still occasionally fall through the cracks and hotels do sometimes honor the guarantee. In Part 2 we’ll review how some travelers approach these guarantees and sometimes receive the benefit, and how others suggest you really should approach getting the best rate.